Determining Manufacturing Costs Steuben Printing Inc. began printing operations

Question

Determining Manufacturing Costs Steuben Printing Inc. began printing operations on March 1. Jobs 3-01 and 3-02 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 3-03 and 3-04 are still in process at the end of the month, and all applicable costs except factory overhead have been recorded on the related cost sheets. In addition to the materials and labor charged directly to the jobs, $3,300 of indirect materials and S4,800 of indirect labor were used during the month. The cost sheets for the four jobs entering production during the month are as follows, in summary form: Determine each of the following for March: Direct and Indirect materials used. Direct materials used and transferred to Work In Process Indirect materials used and transferee to Factory Overhead Direct and indirect labor used. Direct labor used and transferred to Work In Process Indirect labor used and transferred to Factory Overhead Factory overhead applied (a single overhead rate is used based on direct labor cost). Cost of completed Jobs 3-01 and 3-02. Assume that in addition to indirect materials and indirect labor, factory overhead of $3,700 was incurred during March. Determine the overapplied or underapplied overhead for March.

Explanation / Answer

a) Direct material used and transfering in work in process = (14000 + 6000 + 19000 + 4400) = $43,400
Indirct Material used and transfered to factory overhead = $3300(given)

b)Direct labour used and transfered to work in process = (5000+ 3000+5800+1000) = $14,800
Indirect = $4800
c)Factory overhead applied = $111,000(calculated below)

Predetermined overhead rate:     
         Job 101: $3,750/$5,000 = 75%                                              Job102: $2250/$3,000 = 75%

Direct labor cost × Predetermined factory overhead rate: ($14,800 x 75%) = $11,100
d) Cost of completed job = $22750+11250 = $34,000
e.($3300 + 4800+3700) = 11,800
(11800 -11100) = $700 underapplied

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